Canada, while a lower cost manufacturer than the United States, is “not low cost,” General Motors Corp. chairman Rick Wagoner told a group of Canadian reporters at the North American International Auto Show in Detroit. “We can't be naive about that.”

The issue of cost competitiveness in Canada is real, he added, with the rise in the value of the Canadian dollar against its U.S. counterpart increasing the need for continuing improvements in productivity and quality.

As for new plants in North America, any new assembly capacity the auto maker adds will be in growing markets such as Asia and Eastern Europe, Mr. Wagoner said.

Investments that have been made recently in North America have been at existing assembly plants or at new sites to replace older plants, he said. As it has been building replacements such as its Lansing Grand River operation in Lansing, Mich., GM has been shutting assembly plants elsewhere.

Those include its muscle car plant in Ste-Thérèse, Que., in 2001.

A plant in Baltimore is the latest that's scheduled to be closed.

Mr. Wagoner made his comments as the company's Canadian subsidiary, General Motors of Canada Ltd., negotiates with the federal and Ontario governments for more than $400-million in financial help for a major reinvestment at the company's Canadian operations.

“It's important and I think government support is very important,” Mr. Wagoner said of GM's Beacon project.

It's a $2.5-billion GM proposal to invest in several of the company's Canadian manufacturing plants and provide a major boost to its research and development spending in Canada with a $130-million injection.

GM is hoping to tap into an Ontario government fund that set aside $500-million to attract new and replacement automotive investments to the province.

Ford Motor Co. has already tapped the fund for $100-million to turn its Oakville, Ont., operations into a flexible manufacturing plant capable of turning out several models off one or more platforms or basic vehicle underbodies.

In addition to the research and development boost, GM is proposing to turn one of its Oshawa, Ont., plants into a flexible operation, plus invest in its Cami Automotive Inc. joint venture. Suzuki Motor Co. Ltd. is GM's partner in the Ingersoll, Ont., plant.

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